Congress took its first major step this week toward slowing the flow of illegal aliens into the United States -- but the action was wrapped in controversy. Many advocates of reform charge that the immigration bill, which President Reagan is expected to sign, has too many loopholes and will cause a fresh surge of illegal entries.

Opponents of reform contend that the bill will cause discrimination against Hispanics and other minority groups, and could damage the American economy.

The measure, approved by a House-Senate conference committee, contains several key elements:

Employer sanctions, which will make it unlawful for American businesses to hire people who are in the country without the proper documents.

Amnesty for illegal aliens who lived in the United States prior to Jan. 1, 1982.

Provision for agricultural workers who were employed for at least 90 days in the year prior to May 1986 eventually to become US citizens.

Free legal aid to temporary foreign farm workers, if that aid is related to some aspect of their contracts.

A new special counsel at the Justice Department to prevent discrimination against Hispanics while they wait for legalization of their status.

A sharp increase in enforcement by the US Border Patrol.

Some $4 billion in federal funds to help states defray the costs of educating, schooling, and providing other services to formerly illegal residents.

The pressure for action on illegal immigration has been mounting, especially from residents of Sunbelt states. The inflow of aliens has soared during the past 12 months, and about 5,000 illegal entrants are being arrested every day.

The immigration reform bill, however, left all sides at least a little bit unhappy. Even if the bill becomes law, it is clear that the struggle over immigration will be resumed next year over several critical issues, especially the farm-worker provision.

Another area of great concern has been amnesty.

``Hundreds of thousands'' of illegal aliens, mostly from Mexico, are expected to apply for permanent resident status under the bill, according to Alan C. Nelson, commissioner of the US Immigration and Naturalization Service (INS).

But Patrick Burns, director of the William Vogt Center for Population/Environmental Balance, says the potential number of illegals who may be granted resident status is almost certainly a million or more.

Mr. Burns says the INS will be swamped with applications, and the great temptation will be to ``rubber-stamp'' any application that comes along.

There's another danger: Passage of this bill could set off a fresh wave of illegal entries along the Mexican border, says Roger Conner, executive director of the Federation for Immigration Reform.

Forged documents of the kind needed to get permanent resident status under the amnesty provision are for sale in towns all along the Mexican border. Forgers are expected to do a land-office business during the next few months in Texas and California.

Burns says amnesty may also be setting a bad precedent. ``Amnesty is a little like corn chips; you can't just have one,'' he explains.

By the time this amnesty period ends, thousands of additional illegal aliens will have entered the US. Then pressure will grow for another amnesty, Burns says.

But it was the provision for amnesty that helped pull together the coalition that has brought this bill close to passage. Hispanics demanded it, as did a number of moderate and liberal Democrats and Republicans.

Without amnesty, the US appeared to have only two choices: Either round up all the illegals (there are estimated to be 4 million to 8 million in the US) and ship them out; or allow a large underground community of noncitizens to continue existing indefinitely. Neither choice was acceptable to Congress or the President.

To get amnesty, however, Hispanics and others had to accept a second provision: a crackdown on employers who hire illegals.

Some experts say it is the draw of jobs that keeps the flow of aliens heading toward the US. Take away the jobs, and you stop the flow -- or so the reasoning goes.

The bill would impose a fine on businesses of $250 to $2,000 for each illegal alien hired, for the first offense. Habitual offenders could face fines of $3,000 per alien and six months in prison for the employer.

Hispanics worry that sanctions could hurt their chances for jobs, even if they are in the US legally. To meet that concern, the bill provides that employer penalties would end after three years if they led to discrimination.

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